BWC sees mixed returns on equity fund investments

The Ohio Bureau of Workers Compensation has seen mixed returns on the investments it has made since 1998 in Northeast Ohio private equity funds, according to a report released today by BWC.
The local funds posting positive results on BWCs investments as of March 2005 are Brantley Partners, with a 42% return; Blue Point Capital Partners, 31%; Edgewater Growth Capital Partners LP, 27%; and Peppertree Partners, 3%.
Five other Northeast Ohio funds posted losses on their BWC investments. They are MWV Pinnacle Management Co. with a 52% loss; Primus Venture Partners, 31%; Draper Triangle Ventures LP, 23%; Early Stage Partners, 19%; and MCM Capital Partners, 15%.
Those percentages represent the difference between the amount of BWC money the private equity funds invested in companies and the total value of those companies as of March 2005. The value of those investments can change over time and does not mean the money is permanently lost.
The report was conducted last year by Ennis Knupp + Associates to help BWC determine the value of its private equity investments, which account for 3% of BWCs total investments. Overall, BWC had a 4.5% return on its private equity investment as of March.
Although the report was for internal purposes, BWC made it public because of a request for it under the Freedom of Information Act made by the Columbus Dispatch.
Jonathan Murray, a partner with Early Stage Partners, said the decrease in the value of BWCs investment in his fund and other young venture capital funds is not an accurate reflection of how the funds are performing.
He said it takes time for venture capital investments in startups to mature, so its natural to see losses in the early going. BWC invested in Early Stage Partners in 2002.
In the business we are in, it is a five-year sow and a five-year reap, Mr. Murray said. In this stage in the fund, the money goes in one direction. There is no expectation this early in the fund that the money will go in the other direction.
BWC did not release detailed information on the value of the companies the private equity firms have invested in, as it had planned, because of complaints by venture capitalists that public disclosure could put those companies at a competitive disadvantage.
Instead, BWC will wait for a ruling from the Franklin County Court of Common Pleas on whether it can release data on how the private equity funds value their investments. That data would detail the value of several local companies that have received BWC money.